Matthew Casey: The Corporate States of America?

Friday

Jan 29, 2010 at 12:01 AMJan 29, 2010 at 12:22 PM

While the recent election of Massachusetts Republican Scott Brown to the U.S. Senate sent shockwaves across the nation, a Supreme Court decision released just two days later will ultimately have a far greater impact on the American political system.

Matthew Casey

While the recent election of Massachusetts Republican Scott Brown to the U.S. Senate sent shockwaves across the nation, a Supreme Court decision released just two days later will ultimately have a far greater impact on the American political system.

In a 5-4 decision split along ideological lines, the conservative wing of the court struck down significant portions of the Bipartisan Campaign Reform Act (also known as the McCain-Feingold Act), along with dozens of state and federal statutes and decades of established case precedent.

Despite this outcome, conservative supporters of the decision have thus far refrained from accusing the court of practicing “judicial activism” or “legislating from the bench.”

Prior to the court’s decision, corporations were required to form political action committees (PACs) and comply with applicable regulations to participate in the political process. Direct corporate financing of political advertising was prohibited.

Today, corporations are free to spend unlimited amounts from their treasuries to support or attack candidates of their choice, injecting millions — if not billions — of dollars and influence into the political process.

In a rare alliance with the ACLU, the court’s conservative bloc based the decision on First Amendment grounds. Justice Anthony Kennedy, writing for the majority, stated that “speech is an essential mechanism of democracy — it is the means to hold officials accountable to the people…” This sentiment, while superficially compelling, misses a key point: corporations are not people.

Corporations are legal devices, created and regulated according to the laws of the states in which they are incorporated. To maximize efficiency, the government grants special benefits to corporations, including limited legal liability and perpetual life. They exist for a single purpose: to make money for their shareholders.

The inherent rights we retain as enumerated in the Constitution are personal in nature. In contrast, corporations are inanimate and intangible: they cannot exercise religious freedom; they cannot keep and bear arms; they cannot exercise the 5th Amendment’s privilege against self-incrimination.

If a corporation commits a crime, it cannot be imprisoned. If our nation goes to war, a corporation cannot die in defense of its country. Corporations cannot vote.

Yet the Supreme Court has declared these artificial products of regulation free from regulations designed to control their unrivaled ability to pour billions of dollars into an already corrupt political system — all in the name of free speech.

Chief Justice John Roberts argued that such regulation could “prohibit newspapers from running editorials or opinion pieces” if the publisher was a corporation. However, the First Amendment protects both the personal right of free speech and the press; for that reason, McCain-Feingold included an express exemption for media corporations.

Regardless of your preferred legal interpretation, the new precedent is now the law of the land. Depending on the source, the decision is viewed as either a triumph of civil liberties or the end of democracy in America. Reality likely lies somewhere in between.

Studies have shown a relationship between campaign expenditures and success, but the correlation is not particularly strong. “Freakonomics” authors Steven Levitt and Stephen Dubner found that cutting spending by half results in a one percent decline in the vote, while doubling spending only results in a one percent increase.

However, because the impending influx of political spending will likely be beyond anything experienced in modern history, there is no true baseline for comparison. Due to the unique advantages conferred upon them by government, corporations can aggregate capital and exploit economies of scale more efficiently than any other form of business: though they represent just 20 percent of all American businesses, corporations account for more than 84 percent of all revenues.

In 2008, Exxon-Mobil declared a profit of $45.2 billion, more than the gross domestic products of Jamaica and Lebanon combined. That same year, a record $1.5 billion was spent on the presidential election — an amount equal to just 3.5 percent of Exxon’s profit.

Justice Kennedy may honestly believe that the decision of the court will help to “hold officials accountable to the people,” but if a corporation decides to “invest” billions to support favored candidates, once elected, those officials will only be accountable to the corporation’s board of directors.

Complicating the matter further is the fact that multinational corporations with foreign investors are now free to expend vast sums to influence American policy in ways that may not serve our national interests.

This is not a Democratic or Republican issue, nor is it a conservative or liberal issue: all sides will be influenced by the forthcoming and potentially massive infusion of corporate money. Perhaps this will be as close to true bipartisanship as we will get.

On the bright side, it’s quite possible that we’ll be left with the best government money can buy.

Read more from Matthew Casey at matthewcasey.net. This column is the opinion of the writer and not of the newspaper.

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